We all know the basics of marketing and promoting a business. Social media expert has even become a new position. Most new businesses have some kind of presence whether it’s weekly newsletters or sponsored ads, they are doing something to grab your attention. It can be challenging for the entrepreneur who launches a product in a noisy market. But it is still possible to stand out in an overly saturated market. John Tabis is the CEO of The Bouqs, a flower delivery service that is from farm to client. In a $1 billion industry, one could get lost but Tabis has been successful. After recently raising $24 million in Series C, the company continues to grow as well as their customers. MillionaireMatch got the scoop on how this company stays at the top.
“Getting someone to buy something online is in itself a commodity,” Tabis said. Don’t take it lightly that you have paying customers. Tabis explained that having a business in an industry with lots of competitors doesn’t make it easy. “Our competition made flowers not cool for a very long time,” said Tabis. His competition made flowers look like the last resort gift. Why give flowers when you can give diamonds? In order for The Bouqs to stand out, he had to implement a clear strategy.
“Have a mission. Your mission cannot be to make money selling stuff. You have to have a reason for being that goes beyond that. Your mission should make consumers rally behind it. It’s going to create a stronger relationship with the consumer,” Tabis advised. Creating great content to accompany his product was key for his success. “You have to give them something new,” he said about creating a different story around an old product like flowers. As an entrepreneur, Tabis said you have to be clear on one thing, “What is the thing that you are going build your business on? Tom’s is one of the best storytelling brands in the world. Their entire brand is about buying and giving at the same time.”
Not only has Tabis been successful gaining customers, but they also give repeat business. “Building that mission, understanding what that mission is, and living that mission is the single most important thing to building loyalty long term,” he said. “Building content around your product isn’t everyday, but we will give you enough reasons to come back,” he continued. One of those reasons is making sure they give amazing customer service. “Clients expect really amazing service. If not, they will blast you on social media,” he explained.
Two ways Tabis assures a great experience are eliminating hidden fees on the site and not overcrowding their customers’ inbox. He simply said, “Respect your clients.” Many sites post one price and by the time you get to check it, it has increased due to fees you didn’t know existed. Tabis also tries to send out that great, engaging content he believes is important, no more than two or three times a week to your inbox.
If he could offer one piece of advice for the entrepreneur, it would be, “Transparency is absolutely critical to survive.” To date, the company has raised $43 million in funding. He plans to increase his team from 40 to 100 by the end of the year. For more information, head over to www.thebouqs.com.
The mattress industry is a pretty stable industry. People purchase new mattresses everyday that they will keep for 8 to 10 years. It’s a $14 billion industry that hasn’t seen much of a change or anything new and exciting. Well, that was true until the company Casper opened up for business.
In April 2014, Casper was launched. Casper offers the perfect mattress for everyone while allowing customers to skip the awkward sales floor pitch. You can have your perfect mattress shipped to your door, and you get to try it for 100 nights commitment free. Philip Krim, CEO of Casper, wanted to re-invent one of the worst retail experiences a person could have. Krim and his co-founders have raised over $69 million dollars. MillionaireMatch got the scoop on how this company woke up a sleeping industry.
“Our goal is to provide the most exciting brand within the category,” Krim said. A mattress arriving in a box is pretty exciting. “It creates the perfect night of sleep for everyone,” Krim continued. Krim, who attended the University of Texas, knows the mattress industry well. He spent his early years building e-commerce sites that sold them. With his experience in the industry, he knew there was a need for something innovative. That doesn’t mean that he and his team didn’t hit a few hard lessons.
Krim had projected to reach $1 million in revenue for the year. Casper was such a hit, the company reached that number in 28 days. They reached $20 million in the first ten months. Sounds like a good problem to have, but Krim wanted to ensure they offered a great customer experience from beginning to end. “We had a lot of early customers when we launched in April 2014. We didn’t really plan on that. We under forecasted what we thought we would launch with. We ending up doing our yearly forecast in the first two months. That caused a lot of strain on the supply chain and customer experience,” Krim explained. “Fortunately, we have had really great customers from the beginning. They’ve allowed us to catch up. We continue to learn everyday on how to improve on those experiences,” he continued. Today, the company has a $550 million valuation.
The mattress industry has seen a spike as Casper has created competitors. “We don’t worry about the competitors too much. It’s more about upping our own game,” Krim said. “We love that we are providing a better value and a better service,” he continued. Since their launch, they have added some additional products, pillows and sheets. “There has never been a better time to be doing what we are doing, which we hope is to be building the first end to end brand around all things sleep. I think people realize that investing in a great mattress, and investing into great products and sleep accessories can greatly improve your life in a dramatic way,” he said.
He did offer some advice to those on the entrepreneurial trail. “For us it’s about hiring the right people and executing on the vision that we have,” Krim said about choosing your team. He also offered, “Don’t get too overwhelmed with the daunting challenges of starting a startup.”
In case you are wondering, the company was named after one of the co-founder’s college roommates who couldn’t fit into his bed. The company is headquartered in New York City, and has opened an office in Berlin. For more information on this great startup, visit their site at www.casper.com.
Some startups are lucky enough to get funding right away, but there are many who go through meeting after meeting trying to find the answer to the golden question. What do investors want? Well, MillionaireMatch can help with that. We got the scoop from serial entrepreneur Bastian Lehmann, CEO of Postmates. Postmates allows consumers to order food and goods that may not be conveniently located to them and have their craving within minutes. In October 2016, Postmates closed with $140 million in funding and a $600 million valuation.
The idea for Postmates first came in 2006. But like many entrepreneurs, Lehmann had attempted other businesses. Lehmann, who was a college drop-out with a dream to be a movie director, launched his first business called Seven A Day. Lehmann was unable to raise money. So, with the help of his parents, he bootstrapped the company for a year. It eventually failed.
Lehmann met his co-founders Sam, in London, and Sean in the U.S. They soon created a startup called Curated.by. Curated.by later evolved into Postmates. Once again, Lehmann attempted to get funding. Lehmann and his co-founders went to Naval Ravikant, who is the CEO and co-founder of AngelList. He wasn’t impressed with their idea, but instead he offered them the opportunity to be venture hackers for his new company. They turned the offer down. But, after showing him a prototype of how the service would work, they walked out of the meeting with their first seed round of $250k.
“Postmates was one of those ideas that just kept haunting me,” Lehmann said. The business model for Postmates was a model that VCs were not familiar with, which made it hard for Lehmann to raise the money needed to get it off the ground. “VCs have this crazy herd mentality. They like to think that they want to be the first to discover a company,” he explained. “They love to compare it to other companies. That’s why they love to invest in the number two or number three in the market. At the time they do, it’s already the most obvious thing in the market,” he continued.
There are those investors who need to see other successful companies with a similar model. There are also those VCs that just believe in the company once they see the pitch. “If they are convinced of something, they don’t need a lot of external singles to justify their opinions,” he said.
There are a few ways to prepare. Being able to answer key questions that more than likely will come up is one of them. “In the beginning, you have to answer questions around who wants to use this and how big is the total addressable market,” Lehmann said. You should also be prepared to answer, “How big is the market? How high will my return be,” said Lehmann.
It didn’t get any easier for Lehmann and his team, not even after making over 1.4 million deliveries a month. “We weren’t prepared to not be so well received for Series A,” Lehmann said. They ran out of money, and had to go back for a bridge round of funding with current previous investors. It’s not an uncommon thing, but Lehmann said you shouldn’t be proud of it. When you get to this level of funding after being in business for a few years, there are another set of questions investors want you to answer. According to Lehmann, you should know how does your company stick out? Are you losing money? If so, why? Are you going to make more money?
Lehmann is now putting his focus on more premium and subscription based services for Postmates. “Our vision is to provide deliveries on a large scale in major metro areas, cheaper than you would pay from a big retailer,” he said.
If you haven’t already used Postmates, do yourself a favor. Head over to www.postmates.com.
Have you ever purchased something for a one-time use and wanted to take it back to the store? If you are looking for a way to have cool summer nights with your own backyard movie or go camping for the weekend without purchasing all the goods, Joymode is just what you need. Co-founded by Joe Fernandez, who is also the CEO and CEO of Klout, Joymode allows you to have those one-time experiences by renting equipment. Fernandez has raised $3 million in funding from several investors including Homebrew, Founders Collective, Sherpa Ventures, and more. MillionaireMatch got the scoop on how Fernandez built up two great companies.
Fernandez was first known by the popular site Klout, which gives its users a score based on social media analytics. Fernandez admits, raising funds for his first startup wasn’t easy. It took him over a year and 37 investors. “I was struggling a lot when I would pitch,” he said. Fernandez explained that some investors wanted lots of data, while some thought he went over too much data. His first four months went back and forth like this. “What finally helped me was deciding the company I wanted to build, and pitching it as many times as it took to find people who wanted to invest in it,” said Fernandez. After 200 pitches, Fernandez got funding from 37 investors, each contributing small amounts. “I was able to get investors to introduce me to other investors,” he explained. It wasn’t his ideal situation. He didn’t want to have so many investors, because it’s too hard to manage. The average check was $25k from each. It was needed to get his startup off the ground.
Even at the time he launched Klout, Fernandez had another idea that he couldn’t shake- Joymode. In 2015, his second startup officially launched without the long funding round. “It was a lot easier this time around than when I did my first round with Klout. With Klout, I had never even met with an investor before. I didn’t have that network,” he said. Today, he has a warehouse in downtown Los Angeles that houses all the products that can be reserved. “We wanted to provide a consistent, magical experience where you could touch a button and step into a life and have the things you want,” Fernandez said. “We don’t judge status any more by on how far out in the suburbs somebody lives and how much they fill their house with stuff. It’s about the experiences that people have,” he continued.
Joymode has a subscription based model. You pay a $99 subscription fee for the year, and that includes a free experience. After that you pay a reservation fee. Other than the backyard movie night, camping and at home karaoke are the favorites.
One bit of advice he has for entrepreneurs, “Not getting too high or too low. Startups are an emotional roller coaster. Hour by hour I would either feel like we were going to take over the world or that we were so screwed. Getting comfortable with those cycles and not letting yourself get too high or too low, has been really impactful on my life.”
Klout was acquired by Lithium Technologies in 2014 for $200 million.
For more information on Joymode, visit their site at www.joymode.com.
The best person to learn from is someone who has failed. In failing, you know what works and what needs to be improved. Justin Kan, a serial entrepreneur and partner for venture capital firm, Y Combinator, shared a few things that all entrepreneurs should be thinking about. MillionaireMatch is sharing those tips with you.
Kan is best known for his startup, Twitch, an online video gaming broadcast, which was acquired by Amazon for $970 million. But before he hit major success, Kan had another startup called Kiko. Kan has publicly admitted that Kiko was a bad idea. “You need to build something that you use, or you have to talk to customers that will use it,” Kan said. Kiko was an online calendar app that not even Kan used. At the time he launched the app, he only had two appointments on a weekly basis. So, he never used his own product. Luckily, he was able to sell Kiko on eBay for $258,000. The winning bid surprised him, and it gave him the push to create another startup.
Kan’s next company would be Justin.tv, which started after a short pitch to Y Combinator’s Paul Graham. Kan walked out of the meeting with $50k to start a live streaming reality show with him as the star. It was an interesting startup, with people watching his every move for 24 hours a day. Justin.tv was actually a back up idea to another really bad pitch. His original idea was to offer an app that could print your online blog content into a coffee table book. Justin.tv eventually was renamed Twitch, after six months.
In 2007, Justin.tv launched, and had a growing community for two years. Kan and his team continued to make changes. “The process was just talking to our customers and identifying what they really wanted from us, and trying to deliver that. We pretty much did that for the first two years,” he said. He added this advice, “Invest in your community.” Kan and his partner, Michael Seibel, had no previous experience with creating video content. They were both programmers, and at the time had to create the technology to do the live stream. In 2011, Kan launched another platform called Socialcam which was a mobile social video app. We like to think this was the precursor for Periscope and Snapchat. Socialcam was acquired by Autodesk in 2012 for $60 million.
Even though they made the effort to involve their community, at some point it stopped growing. “Anything that’s not growing on the internet is about to fall off a cliff,” said Kan. There are ways to know if you are headed off the cliff, or if you are climbing the mountain. “Set milestones for what you think success is,” Kan explained.
After creating and launching several startups, Kan became a partner at Y Combinator. He shared what things he looks out for as an investor. “I see people who have great ideas, and they are working on something that can be successful but they give up. They can’t stick it out,” he said. “What I look for most in founders is people who I think aren’t going to give up. People who are relentless,” said Kan. Some may be looking for overnight success. But Kan advises, “Companies need to be ready for the long haul.”
For those looking to sell their company, Kan says to focus on creating a good product, and a product that people want. He also added that picking a great team is key. “I believe anyone can be successful building a company on the internet, if they are persistent enough. Observe and learn from their experiences. I’m a bad programmer. I’m not a very good manager. I think, I’m just okay. What I did is find really smart people to work with,” he said.
To keep up with Justin, check him out at www.JustinKan.com.